FIN 303 RATIO ANALYSIS PRACTICE 3 EXERCISE 2024

One of the fundamental application of Ratio Analysis principles is in

helping analysts and auditors to deal with incomplete records. These
principles can also be used to verify and validate the accuracy and
fairness of accounting financial statements. Below is the information
relating to Tsau Fruit Juice Ltd.

Quick ratio: = 0.65x Days sales outstanding: = 60

Total assets turnover: = 1.15x Fixed Asset Turnover = 2x
Debt ratio: = 60% Assume 360 days in a year
𝑆𝑎𝑙𝑒𝑠−𝐶𝑜𝑠𝑡 𝑜𝑓 𝑠𝑎𝑙𝑒𝑠
Gross profit margin on sales: = = 12%
𝑆𝑎𝑙𝑒𝑠

BALANCE SHEET

Cash (i)_____ Trade Creditors (ii)_____

Trade Debtors (iii)_____ Long Term Debt 108 000

Stock (iv)_____ Common Stock (v)_____

Fixed Assets (vi)_____ Retained Earnings 118 500

Total assets (vii)_____ Total Equity and Liabilities 520 000

Sales (viii)_____ Cost of Sales (ix)_____

Required:
♦ Help the financial director to complete the balance sheet for
the company.
♦ What advice can you give to the company based on the
information on the completed Balance Sheet.
(Hint: You don’t have to follow the sequential order to fill in the missing figures)!